Greensill Capital for sale before spectacular blow-up

Failed financial upstart Greensill Capital was floated in front of three different buyers in the months leading up to its collapse in early March.

Lex Greensill of Greensill Capital. Picture: Annabel Moeller

Greensill Capital was scrambling to find a buyer for the troubled trade financing business in the weeks and months leading up to its collapse, creditors documents reveal.

The creditors report for the British arm of the failed financial upstart, by liquidators Grant Thornton, reveals a shortlist of three potential suitors was mooted in late January and early February this year.

Greensill Capital sat at the top of Lex Greensill’s empire, facilitating almost $140bn in transactions each year and almost $200m each day. The documents show the three identified buyers had been offered the opportunity to take a deep dive into the business via a data room.

Data rooms are used in mergers and acquisitions to provide confidential and detailed reports about the financial state of a business.

However, the documents show only one of the three interested parties took up the opportunity, before later making a preliminary bid for Greensill on February 22l.

“This original proposal was considered commercial unacceptable and in the opinion of the proposed administrators, could not be executed in the context of an insolvency sale,” the document said.

Following the bid, the bidder reportedly entered negotiations to buy Greensill.

“On March 2 GCUK and other members of the group entered into an exclusivity agreement based on the revised offer from the potential purchaser,” the documents said.

“Extensive negotiations were held, including the negotiation of a sale contract with the interested party both prior to, and in the week following our appointments.”

However, the move by Greensill’s insurers to drop coverage of its debt repackaging and its failure to secure a court order to force it to restore coverage brought the business to a crashing halt on March 8.

David Cameron is set to front British parliament on his links to failed financier Lex Greensill. Picture: AFP

By March 11 negotiations to buy Greensill were called off “ due to a substantial reduction in the value of the offer by the proposed purchaser”.

The liquidators concluded “raising new funds was fundamental to enable the successful restructuring” of Greensill but any attempt to do that was “wholly reliant on the renewal of insurance”.

The report reveals the only option left is the dismemberment of the Greensill empire, with creditors likely to be left $1.55bn short as the company owes much more than it can hope to pay back.

A bevy of high-profile names are owed money in the collapse.

The saga is set to be scrutinised under questioning by the British parliament next week.

Mr Greensill and former British prime minister David Cameron are due to be questioned by parliament next week on the collapse and attempts to lobby key government figures.

The parliament will “carefully examine their actions in relation to Greensill Capital and its interactions with HM Treasury”.

Mr Cameron had worked as an adviser to the lender.

Originally published as Greensill Capital for sale before spectacular blow-up